Changes to card payment fees

[dajop]

I think they are seriously trying to work out how to get more or at least the same as before.

That, on an overall basis, shouldn't be too hard if you believe the previous spin that the current fees don't fully cover merchant fees .... $30 fee on a $130 fare will more than cover merchant fees, but a $30 fee on a $6000 fare most likely won't ... Yet % fee on all fares may mean that the fee on the $130 fare comes down to $2.60 whilst the $6k fare may go up to $120 .... So overall fee is now $122.60 vs $60 before.

 

[PLANT]

Look I'm calling it...... All fees will go up!
To assist in the Virgin operating loss to date, rising dollar, lower interest rates and the government failing to govern the country. Oh don't forget that NBN and climate change..... Got it.... Right move on.....

 

[Deleted member 29185]

I could have written that email for them - would have been along the lines of:

Service message

On 1 September 2016, new government regulations that the industry brought on itself relating to card payment fees will commence (Reserve Bank of Australia Card Payment Regulations). In line with these new regulations, Velocity will make certain changes to the fees charged for card payments. Our legal team have instructed us to notify you of these changes immediately but unfortunately the Virgin revenue management team have gone away to sulk, and don't talk to Velocity anyway so we can't tell you what the new fees will be.

Velocity currently charges a Booking and Service Fee for Reward Seat and Any Seat bookings. From 1 September 2016, Velocity will no longer be allowed to charge this Booking and Service Fee.

From 1 September 2016, a new Card Payment Fee will be charged for payments made via credit or debit card on the Velocity website. The Card Payment Fee will be published on our website once we examine what Qantas is doing and copy them / renegotiate with our credit card companies and once the the Virgin web site team have come back from their 4 year lunch break.

Yours sincerely,
Velocity Frequent Flyer

That may have been typed in jest........but I can't help wondering why I get the feeling it's spot on the money, err credit card fee!

 

[williamsf1]

I agree, it's a bit of a weirdly written email.

The email is from Velocity not Virgin Australia. Velocity only sell reward and anyseat bookings. The good news is that the cc fee will not apply when the tax $$ is over AUD50 or on anyseat bookings...... so from that side it is actually a positive "enhancement".

I guess we will have to wait to see what the cc fee will be on Virgin Australia bookings.

 

[Aussie_flyer]

The email is from Velocity not Virgin Australia. Velocity only sell reward and anyseat bookings. The good news is that the cc fee will not apply when the tax $$ is over AUD50 or on anyseat bookings...... so from that side it is actually a positive "enhancement".

I guess we will have to wait to see what the cc fee will be on Virgin Australia bookings.

It already doesnt cost anything under $50. That's no change

 

[esseeeayeenn]

That, on an overall basis, shouldn't be too hard if you believe the previous spin that the current fees don't fully cover merchant fees .... $30 fee on a $130 fare will more than cover merchant fees, but a $30 fee on a $6000 fare most likely won't ... Yet % fee on all fares may mean that the fee on the $130 fare comes down to $2.60 whilst the $6k fare may go up to $120 .... So overall fee is now $122.60 vs $60 before.

As of March 2016 the Reserve Bank reported that the total merchant fees charged by Visa and Mastercard were 0.77%. Amex 1.67% and Diners Club 2.13%.

So the real fees would be:

1. for the $130 fare only $1 for Visa and Mastercard, $2.17 for Amex and $2.77 for Diners Club.
2. for the $6000 fare $46.20 for Visa or Mastercard, $100.20 for Amex and $127.80 for Diners Club.

If they charge higher percentages, they're gouging.

That's without entering into the debate about whether they should pass these fees on directly at all.

 

[esseeeayeenn]

I can only think that some legal dude told them they need to give a months notice or something.

The email's seeming main purpose was to inform of a new fee and the retraction of another.

I don't think there would be any legal requirement for a notice period. No contract exists until a sale is entered into. As long as you are notified at the time of sale, that would be sufficient for the requirements of consumer law.

 

[Warks]

As of March 2016 the Reserve Bank reported that the total merchant fees charged by Visa and Mastercard were 0.77%. Amex 1.67% and Diners Club 2.13%.

So the real fees would be:

1. for the $130 fare only $1 for Visa and Mastercard, $2.17 for Amex and $2.77 for Diners Club.
2. for the $6000 fare $46.20 for Visa or Mastercard, $100.20 for Amex and $127.80 for Diners Club.

If they charge higher percentages, they're gouging.

That's without entering into the debate about whether they should pass these fees on directly at all.

Those figures indicate we are being ripped off domestically (as we knew) but probably not that bad a deal internationally especially for the expensive cards?

 

[2353]

The reality here is that VA and Q business models both rely on credit card bookings. Sure you can BPay but the process is long and difficult by comparison and the off-airport retail centres that Q used to operate have all well and truly gone. If I buy a car, the standard tyres (while only a small component of the product) are not extras because in theory you can drive a car on the rims, so why is a small but effectively mandatory part of the cost of buying a flight (the fee charged by a service provider to the airline) subject to additional charges?

 

[Deleted member 29185]

The reality here is that VA and Q business models both rely on credit card bookings. Sure you can BPay but the process is long and difficult by comparison and the off-airport retail centres that Q used to operate have all well and truly gone. If I buy a car, the standard tyres (while only a small component of the product) are not extras because in theory you can drive a car on the rims, so why is a small but effectively mandatory part of the cost of buying a flight (the fee charged by a service provider to the airline) subject to additional charges?

Some of the hire car mobs are even worse.......charge the CC surcharge when there is no other way to pay!

 

[williamsf1]

Some of the hire car mobs are even worse.......charge the CC surcharge when there is no other way to pay!

was that not illegal under the old rules ? i thought that companies had to offer some form of " fee free" payment .. ie Bpay / cash etc

 

[Deleted member 29185]

was that not illegal under the old rules ? i thought that companies had to offer some form of " fee free" payment .. ie Bpay / cash etc

I thought it was as well, but some years ago, to prove a point, I tried paying cash (with a cash bond) at Europcar TSV. They sent me out of the terminal booth to the main office at the "yard" (basically across the road a bit). There was a lot of debate and the answer came back that they do not accept cash payments and it must be via card only. It was obvious that I was asking them to do something that they basically had never done and then refused to do, so either it is Europcars position to only accept cards, or they make it so difficult that no one can manage to hire a car without a card....either way, I think the reality is they only accept payment by card and they advertise the rate without the card fee which is added on top last.

 

[serfty]

What they did was indeed in contravention of regulation - but I doubt it would be easy to get the relevant authority to take it up.

 

[ChrisFlyer]

I thought it was as well, but some years ago, to prove a point, I tried paying cash (with a cash bond) at Europcar TSV. They sent me out of the terminal booth to the main office at the "yard" (basically across the road a bit). There was a lot of debate and the answer came back that they do not accept cash payments and it must be via card only. It was obvious that I was asking them to do something that they basically had never done and then refused to do, so either it is Europcars position to only accept cards, or they make it so difficult that no one can manage to hire a car without a card....either way, I think the reality is they only accept payment by card and they advertise the rate without the card fee which is added on top last.

They'd probably just say you could have paid by EFTPOS (savings/cheque) via the same terminal without a surcharge.

 

[Deleted member 29185]

They'd probably just say you could have paid by EFTPOS (savings/cheque) via the same terminal without a surcharge.

I may be wrong, but I'm pretty sure they state no EFTPOS payments.

 

[williamsf1]

What they did was indeed in contravention of regulation - but I doubt it would be easy to get the relevant authority to take it up.

it is very easy

Contact the ACCC | ACCC

The ACCC love getting big scalps like Europecar

 

[Aussie_flyer]

Still no word on jetstar or tiger fees is there?

 

[DavidFlynn]

Virgin Australia fees just in, and as expected they mirror those set by Qantas both in percentage and cap.

 

[Jack_OC]

I may be wrong, but I'm pretty sure they state no EFTPOS payments.

They say on their FAQ:[TABLE="width: 945"]
[TR="class: odd"]
[TD]Can I pay by cash?[/TD]
[TD]You must have an acceptable credit or debit card to rent one of our vehicles.[/TD]
[/TR]
[/TABLE]
I thought the regulations just say that you can't insist on customers using a card if there is a surcharge to use the card. In other words, if there is no fee to use a credit and/or debit card, I think merchants are allowed to refuse to accept other forms of payments? BTW, do Europcar charge credit card payment fees? I can't remember ever paying one, but I could be wrong.

 

[anat0l]

The ACCC love getting big scalps like Europecar

That's if they can even get themselves a scalp to save their hides.

Virgin Australia fees just in, and as expected they mirror those set by Qantas both in percentage and cap.

Very interesting - was expecting some sort of "beat" or one-up-manship from VA.